02 November 2012

Putin's Russia: Crumbling of a Potemkin Facade

Russia's facade is in the nature of a Potemkin Village. Superficially vibrant and forward looking. But look deeper and you will see a deeper, more disturbing truth.

At a time when Russian oil production is falling and large-scale investment is badly needed to open up new fields, the Kremlin is instead spending $55 billion in cash and shares to acquire control of a major oil company from the private sector.

As the government splurges, Russia's oligarchs are shifting more money abroad because of the poor investment climate. Deputy Economy Minister Andrei Klepach estimates that $50-60 billion of private capital will flow out of Russia this year. Moscow bank Uralsib predicts the figure could hit $80 billion.

...Almost a third of city-dwellers would like to emigrate from Russia, according to a poll in September. Among young people the proportion rose to nearly half. The most favored destinations were Europe, the United States, Australia and New Zealand.

The reasons for this exodus of talent and money? A growing sense among educated Russians that their country is heading in the wrong direction, and that no change is likely._Reuters

Half of Russian men do not survive to the retirement age of 60. Russia's abysmal male mortality is due to alcoholism, suicide, murder, smoking related diseases, tuberculosis, HIV, drug abuse, and a general feeling of futility, hopelessness and despair.

This is why Russia's young are so desperate to get out. They see what is happening to their parents, uncles, aunts, and other middle aged Russians. They want no part of that dead end life.

Other than rich natural resources, Russia's main asset is the minds of its people. Too bad the corrupt Putin government is squandering that vast resource of human wealth.